Supreme Court sets Limitation Period for application to set aside arbitration award

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Case Name: AnilKumar Jinabhai Patel(D) v. Pravinchandra Jinabhai Patel

Decided On 29.03.2018

Bench: Justice RK Agrawal and Justice R Banumathi

Supreme Court of India on Thursday ruled that limitation period for filing of the application for setting aside arbitration award begins from the date of receiving of the signed copy of the award.

Facts

The bench was listening to an appeal filed against a judgment of Bombay High Court Bench at Aurangabad. Appellant and the respondents were brothers who started a business of manufacturing fertilizer, chemical, and real estate. They set up a number of companies, partnership firms and bought numerous movable and immovable property. To avoid any disputes and litigation both the brothers decided to split up the assets among themselves. Parties mutually agreed to appoint Latikaben and Bhikhalal Nathalal Patel who are sister and brother in law of both the brothers as arbitrators. Arbitrators by an award dated 07.07.1996 divided some assets between the brothers and kept some undivided with interest thereon of both the groups. Award was duly signed by both the brothers with a recital that they and their family members will act as per the award. Thereafter by an award dated 03.11.1996 interests were divided and the matter was finally settled. Anilkumar and his family member approached the Jalgaon District Judge contending that they became aware of the award dated 07.07. 1996 only after the notice of execution proceedings was served on them on 11.08.2005. District Judge ruled in their favor. Defendants appealed against this decision in front of Aurangabad Bench of Bombay High Court. Bombay High Court reversed the decision of District Judge Jalgaon. The matter reached the Supreme Court. Following issues were presented before the Supreme Court.

Issues

  1. Whether Anilkumar represented his family in the arbitration proceeding and he accepted the award on his family’s behalf?
  2. Whether High Court was right in holding that application for setting aside arbitration award was barred by limitation?

The decision of the Court

Supreme Court of India answered both the question in affirmative and relied on State of Maharashtra and Ors v. Ark Builders Pvt. Ltd (2011) 4 SCC 616 and Union of India v. Tecco Trichy Engineers and Contractors and said that limitation period for setting aside arbitration award application begins on the date of receiving of the signed copy of arbitration award by the party making it. Appellants contended that other members of Anilkumar’s family did not receive the copy of the award and were made aware of the award only after notice of execution, Hence period of limitation would start only from the date when they got the copy of the award. The Court rejected this contention and said that award dated 03.11.1996 was duly signed by Ajitkumar and his undertaking in the same award that he and his family members agreed and approved the award shows that Ajitkumar Patel was acting for himself and on behalf of his family. Moreover, Court also said that there was plenty of evidence which establishes beyond a doubt that Ajitkumar was well aware of the award dated 07.07.1996 and being the head of the family signed copy served on him amounts to signed copy being served on his family members as well.

Learning of the case

From this case, we learn that limitation period for application setting aside arbitration award begins from the date of the signed copy of the award delivered to the party making it.

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